the charismatic corporation: finance, administration, and

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Stefan Link The Charismatic Corporation: Finance, Administration, and Shop Floor Management under Henry Ford After assuming sole ownership of the Ford Motor Company in 1919, Henry Ford transformed his business into a mission- driven organization that prioritized improvements in produc- tion and engineering over investment returns. At the same time, the company programmatically rejected bureaucratic management in favor of informal procedures and ingrained collective protocols, both in administration and on the shop oor. This article references Max Webers view of charismaticauthority to explain the companys organizational structure, its culture, its ambivalence toward Henry Fords worst tendencies and prejudices, and its resilience during the decline of his leadership in the 1930s and 1940s. Keywords: Henry Ford, Fordism, Ford Motor Company, charisma, Max Weber, corporate governance, corporate nance, accounting, mass production I n May 1947, Fortune magazine asked its readers to imagine a companywith assets close to a billion dollars operating on a set of books that would put a country storekeeper to shame.This was a highly integrated company, employing 130,000 men and turning out a million cars and trucks a year, which possessed no accurate knowledge of which individual operation was paying its wayand whose manage- ment had no clean lines of authority or responsibility anywhere delin- eated.For Fortunes readers such a company may have been hard to imagine, but it did exist: the magazine was speaking of the Ford Motor Company. Henry Ford had died weeks earlier, and the magazine was I would like to thank Noam Maggor, Gabrielle Clark, Udi Greenberg, and two anonymous reviewers for valuable comments and suggestions. Noah Grass provided research assistance. Business History Review 92 (Spring 2018): 85115. doi:10.1017/S0007680518000065 © 2018 The President and Fellows of Harvard College. ISSN 0007-6805; 2044-768X (Web). of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/S0007680518000065 Downloaded from https://www.cambridge.org/core. IP address: 65.21.228.167, on 02 Nov 2021 at 06:11:33, subject to the Cambridge Core terms

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Page 1: The Charismatic Corporation: Finance, Administration, and

Stefan Link

The Charismatic Corporation: Finance,Administration, and Shop Floor Management

under Henry Ford

After assuming sole ownership of the Ford Motor Company in1919, Henry Ford transformed his business into a mission-driven organization that prioritized improvements in produc-tion and engineering over investment returns. At the sametime, the company programmatically rejected bureaucraticmanagement in favor of informal procedures and ingrainedcollective protocols, both in administration and on the shopfloor. This article referencesMaxWeber’s view of “charismatic”authority to explain the company’s organizational structure, itsculture, its ambivalence toward Henry Ford’s worst tendenciesand prejudices, and its resilience during the decline of hisleadership in the 1930s and 1940s.

Keywords: Henry Ford, Fordism, Ford Motor Company,charisma, Max Weber, corporate governance, corporatefinance, accounting, mass production

In May 1947, Fortune magazine asked its readers to “imagine acompany” with assets close to a billion dollars “operating on a set of

books that would put a country storekeeper to shame.” This was ahighly integrated company, employing 130,000 men and turning out amillion cars and trucks a year, which possessed “no accurate knowledgeof which individual operation was paying its way” and whose manage-ment had “no clean lines of authority or responsibility anywhere delin-eated.” For Fortune’s readers such a company may have been hard toimagine, but it did exist: the magazine was speaking of the Ford MotorCompany. Henry Ford had died weeks earlier, and the magazine was

I would like to thank Noam Maggor, Gabrielle Clark, Udi Greenberg, and two anonymousreviewers for valuable comments and suggestions. Noah Grass provided research assistance.

Business History Review 92 (Spring 2018): 85–115. doi:10.1017/S0007680518000065© 2018 The President and Fellows of Harvard College. ISSN 0007-6805; 2044-768X (Web).

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covering the efforts of Henry Ford II to sort through “the amorphousadministrative mess” his late grandfather had left behind. The originsof the disarray lay in the 1920s, the article said, when under “the sheerineptitude of Ford management” the company lost its sales dominanceto its competitors and stumbled through the 1930s with barely a profit.Now the young Ford was applying strong and salutary medicine to theailing organization by rebuilding it “in the image of General Motors”:hiring General Motors (GM) executives with the task of establishing adecentralized management structure, subjecting operations to financialcontrols, and implementing uniform accounting metrics.1

Business historians have for the most part agreed with Fortune’s1947 piece: by the 1920s, the company that had pioneered the massproduction of automobiles was losing its grip. The famous Ford ModelT was fast becoming obsolete, and the company began staggeringtoward near-terminal decline thanks to financial negligence, failures inbookkeeping, and inept management. At fault was Henry Ford, whoassumed full control of the Ford Motor Company by acquiring all minor-ity stock in 1919. As a result of this decision, business historianshave said, the company clung to “an antiquated administrative systemtotally unequal to the demands of a modern era” under the “personalcontrol of one eccentric individual.”2 Under Henry Ford, the companylacked “any systematic organizational structure.”3 It suffered “organiza-tional degeneration.”4 It wasmired in “chaos.”5 In passing these verdicts,historians keep the comparison with General Motors close at hand: theimplication is that Ford could have avoided its difficulties if it had notwaited until after World War II to refashion its management, GM style.6

Confronted with such overweening consensus, one wonders how thiscompany survived more than two decades of managerial incompetence

1 “The Rebirth of Ford,” Fortune, May 1947, 82–89, 204, 207–11.2 Allan Nevins and Frank Ernest Hill, Ford: Decline and Rebirth, 1933–1962 (New York,

1962), 231; Thomas K. McCraw and Richard S. Tedlow, “Henry Ford, Alfred Sloan, and theThree Phases of Marketing,” in Creating Modern Capitalism: How Entrepreneurs, Compa-nies, and Countries Triumphed in Three Industrial Revolutions, ed. Thomas K. McCraw(Cambridge, Mass., 1995), 278.

3 Alfred D. Chandler, Strategy and Structure: Chapters in the History of the IndustrialEnterprise (Cambridge, Mass., 1962), 373.

4 Steven Tolliday, “Transplanting the AmericanModel? US Automobile Companies and theTransfer of Technology and Management to Britain, France, and Germany, 1928–1962,” inAmericanization and Its Limits: Reworking US Technology and Management in Post-WarEurope and Japan, ed. Jonathan Zeitlin and Gerry Herrigel (Oxford, 2000), 79.

5 Thomas K. McCraw, American Business, 1920–2000: How It Worked (Wheeling, Ill.,2000), 27.

6 See also Alfred D. Chandler, Giant Enterprise: Ford, General Motors, and the Automo-bile Industry (New York, 1964). Andrea Colli used the Ford Motor Company as a star exampleof a failed transition from family control tomanagerial delegation. Colli, TheHistory of FamilyBusiness, 1850–2000 (Cambridge, U.K., 2003), 51–52.

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without collapsing entirely, let alone how it set production recordsthroughout the early 1920s and again in 1929, how it accomplished engi-neering feats like the mass-produced V8 engine (1932), or how it becamea pillar of the “Arsenal of Democracy” during World War II. That thesummary assessment of managerial dysfunction is at odds with areality of efficient (or at least prolific) operations has been variously rec-ognized.7 Research on the Ford Motor Company, however, remainslargely reflective of the notion that its founder was both a productiongenius and an administrative dud. The company’s production methodshave received detailed scrutiny, but its financial and administrative real-ities remain almost unexamined.8 (Not coincidentally, the inverse couldbe said of General Motors.)

The purpose of this article is to open the black box of Ford manage-ment. After Ford had established his unchallenged authority with the1919 buyout, how did the company actually operate? This article considersthree areas: finance, administration, and shop floor management. As wewill see, the company—no longer beholden to outside investors—rejectedfinancial control metrics and procedures of managerial legibility. Instead,Henry Ford turned his company into a mission-driven organization thatprioritized production, engineering, and the pursuit of social and politicalgoals over investment returns. Administration followed informal, per-sonal, and flexible routines instead of codified bureaucratic structures.Shop floor supervisors, meanwhile, rejected the methods of Taylor-typeefficiency systems and instead relied on ingrained collective protocolsand routines based on an intimate familiarity with the production process.

The success of these informal arrangements depended on what onestaffer described as Henry Ford’s “invisible leadership”; Ford provided,at least to a core group among the administrators and shop superinten-dents who managed day-to-day operations, the inspiration for a

7DavidHounshell noted that the “smooth operation” of the Ford shopwas based on sophis-ticated logistics management. Hounshell, From the American System to Mass Production,1800–1932: The Development of Manufacturing Technology in the United States (Baltimore,1984), 272–73. Recent work by Damon Yarnell has brilliantly illuminated the flexible and effi-cient purchasing and supply routines at the Ford Motor Company. Yarnell, “Behind the Line:Outside Supply, Mass Production, and the Question of Managerial Expertise in the Model TEra” (PhD diss., University of Pennsylvania, 2010); Yarnell, “Ford Motor Company’s LostChapter: Purchasing Routine and the Advent of Mass Production,” in The Emergence of Rou-tines: Entrepreneurship, Organization, and Business History, ed. DanielM. G. Raff and PhilipScranton (Oxford, 2016), chap. 5.

8Hounshell, From the American System, chaps. 6 and 7; Daniel M. G. Raff, “Making Carsand Making Money in the Interwar Automobile Industry: Economies of Scale and Scope andthe Manufacturing behind the Marketing,” Business History Review 65, no. 4 (1991): 721–53;Karel Williams, Colin Haslam, and John Williams, “Ford versus ‘Fordism’: The Beginning ofMass Production?” Work, Employment & Society 6, no. 4 (1992): 517–55; Karel Williams,Andy Adcroft, and Skhdev Johal, “The Myth of the Line: Ford’s Production of the Model Tat Highland Park, 1909–1916,” Business History 35, no. 3 (1993): 66–87.

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collective ethos of initiative in working for the company.9 The FordMotor Company, in short, was a charismatic organization. This factaccounts for both the company’s successes during the 1920s and its resil-ience despite a crisis of leadership in the 1930s and 1940s.

In invoking charisma here, I intend to return to Max Weber’s origi-nal formulations of the concept and to highlight four features in partic-ular. First, “charisma” does not designate the qualities of an individual,but describes, as Weber said, a “definite social structure” coproduced bya leader and his or her community. Charismatic authority is fundamen-tally a collective endeavor; in grouping around a leader, followers consti-tute a “horizontal” social bond among themselves as much as a “vertical”one between themselves and the leader. Second, charisma is based on amission that the leader expresses and symbolizes, that endows him orher with legitimacy among followers, and that the followers embraceas a collective purpose. As Weber clarified, not any kind of mission willdo; true charismatic authority requires a “revolutionary” mission, onethat repudiates established norms and challenges the political and eco-nomic status quo. Third, charismatic authority will develop an organiza-tional structure that reflects the collective mission. Charisma is notamorphous; it includes “a staff and an apparatus of services” that is“adapted to the mission of the leader.”10 Fourth, as Weber would haveinsisted, identifying a given social order as charismatic is a value-neutral analytical move. A fool or a genius, a hero or a quack may be acharismatic leader, as long as he or she finds disciples.11 Positing theFordMotor Company as a charismatic organization, then, implies no val-idation of Henry Ford’s ideas (some of which were famously repugnantor misguided), nor is it an attempt to whitewash his labor policies,which were notoriously repressive. Applying charisma to the FordMotor Company is an attempt, however, to describe the company’s man-agement practices in terms that are adequate to their intrinsic logic.

9Reminiscences of W. C. Cowling, Acc. 65, p. 10, Benson Ford Research Center, Dearborn,Mich. (hereafter BFRC). For biographical sketches of some of Ford’s closest associates, seeFord R. Bryan, Henry’s Lieutenants (Detroit, 1993).

10Quotes are taken from Max Weber’s original formulations on charisma, in Weber,Economy and Society: An Outline of Interpretive Sociology, eds. Gunther Roth and ClausWittich, 2 vols. (Berkeley, 1978), 1:241–71, 2:1111–57 (here: 1:244 and 2:1117–19). Myreading of Weber has benefited from Stephen Turner, “Charisma Reconsidered,” Journal ofClassical Sociology 3, no. 1 (2003): 5–26; Christopher Adair-Toteff, “MaxWeber’s Charisma,”Journal of Classical Sociology 5, no. 2 (2005): 189–204; David d’Avray, Rationalities inHistory: A Weberian Essay in Comparison (Cambridge, U.K., 2010); and Joshua Derman,Max Weber in Politics and Social Thought: From Charisma to Canonization (Cambridge,U.K., 2012), chap. 6. Instructive reflections on charismatic authority are found in SvenReichardt and Wolfgang Seibel, eds., Der prekäre Staat: Herrschen und Verwalten im Natio-nalsozialismus (Frankfurt, 2011).

11 “The ‘proof’ of charisma . . . is the presence of a following.” Nicole Woolsey Biggart,Charismatic Capitalism: Direct Selling Organizations in America (Chicago, 1989), 132.

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My core contention is that the organizational structure and admin-istrative practices of the Ford Motor Company are best understood as aninstitutionalized expression of the company’s charismatic mission. Thismission arose from the social background and skilled-labor ethos ofHenry Ford and his staffers. In the company they ran, Ford and his asso-ciates sought to give expression and practical validation to their worldview, according towhich automotivemass productionwas an achievementof shop floor expertise. On both philosophical and practical grounds, thisview challenged two powerful countervailing forces of the era: finance-driven corporate capitalism and the movement of “systematic” shop andpersonnel management. This contrarian agenda gave Ford’s mission its“revolutionary” quality—at least in the eyes of its adherents.

Because a charismatic mission aims at the social and political, thestandard vocabulary of market strategy and economic rationality failsto capture it adequately. To say that the Ford Motor Company was acharismatic organization, then, means more than shoehorning thecompany into familiar firm typologies. One might explain the company’sclosely held ownership, and its reinvestment orientation, by pointing outthat it was a family business.12 Alternatively, one could identify Ford asan “entrepreneurial” firm that exhibits features often found among new,technology-oriented companies (a dominant founder, a loyal group ofstaffers, flexible hierarchies, investments in process innovation, etc.).13

Functionalist classifications such as these, however, fail to identify theroot origins of Ford’s governance structures, which resided in themission. Charisma, in contrast, emphasizes precisely those (putativelyextra-economic) factors—social hierarchies, affective relationships, pol-itics, and ideology—that functionalist theories of organization struggle tocapture.14 As a social structure, charisma exceeds the boundaries of themarket. Charisma, succinctly put, is a sociopolitical phenomenon, not afirm type. A prepossessing leadership style is not charismatic authority; aproduct strategy is not a charismatic mission.15

12 Colli, History of Family Business; see also the discussion in Christina Lubinski, “PathDependency and Governance in German Family Firms,” Business History Review 85, no. 4(2011): 699–724.

13 See, for example, HenryMintzberg, The Structuring of Organizations: A Synthesis of theResearch (Englewood Cliffs, N.J., 1979), esp. 305–13.

14 Biggart, in Charismatic Capitalism, uses Weber to demonstrate how charisma tran-scends the purported boundaries between the business sphere and the social world.Members of direct-selling organizations, such as Mary Kay or Tupperware, draw both asense of social purpose and the impulse for committed sales activity from the organization’smission. Direct selling is at once a business activity, a social structure, and a world view,which members bring into their families and friendship circles.

15 For this reason, I also sidestep here the literature on charisma in “leadership studies.”This literature considers charisma as a leadership “attribute,” whose effect on followers andorganizational “performance” is open to quantitative measurement, and which aspiring

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Using charismatic authority (conceived as a social structure) tounderstand the Ford Motor Company, then, has several advantages. Itdispenses with normative assumptions that equate efficiency withbureaucracy and professionalized management. It allows us to under-stand the company’s administrative structures not as the product of anidiosyncratic personal style, or as chaotic, dysfunctional, and resultingfrom some failure; rather, Ford management emerges as a coherentsystem in its own right, one that accorded with the company’smission-driven nature. Charisma draws attention to the social and polit-ical, rather than market-internal, nature of that mission. Finally, cha-risma allows us to shift our focus from the administrative “top” towhat Weber called the “charismatic administrative staff”—those respon-sible for running the company on a day-to-day basis. Since the comple-ment to charismatic rule is not obedience but initiative, such rule can,ironically, largely dispense with the leader’s constant supervision, aslong as subordinates believe in the mission and act to perpetuate it.16

To reconstruct how the FordMotorCompany operated, this article usestwo groups of sources. The first is the company’s accounting records, whichare preserved in scattered and discontinuous form at the Benson FordResearch Center (BFRC) in Dearborn, Michigan. Concerning the adminis-trative practice of the Ford Motor Company, we cannot hope to draw onthe usual artifacts of corporate bureaucracy, such as organization charts orannual reports, which the company deliberately did not maintain. Instead,however,wehaveacomprehensivecollectionof interviewswith formerstaff-ers from across the entire Ford organization. In the 1950s, researchers con-ducted more than two hundred of these interviews in connection with theFord trilogy by Allan Nevins and Frank Ernest Hill.17 The BFRC catalogsthese oral histories under Accession 65 as “Reminiscences,”which suggestsanecdotal material; however, thesematerials actually make up a remark-ably rich repository of information on company policy, engineering, andshop floor practice, as well as administration, accounting, and finance.18

CEOs might acquire through training. Such an approach empties charisma of Weber’s originalemphasis on social structure and political context. For introductions to the literature, see JayA. Conger and Rabindra N. Kanungo, Charismatic Leadership in Organizations (London,1998); and Bruce J. Avolio and Francis J. Yammarino, eds., Transformational and Charis-matic Leadership: The Road Ahead, 10th Anniversary Edition (Bingley, U.K., 2013). For a cri-tique of this literature from a sociological perspective, see Janice M. Beyer, “Taming andPromoting Charisma to ChangeOrganizations,” LeadershipQuarterly 10, no. 2 (1999): 307–30.

16Weber, Economy and Society, 1:253. The importance of self-initiative in charismaticorganizations is impressively borne out in Biggart, Charismatic Capitalism.

17 Allan Nevins and Frank Ernest Hill, Ford: The Times, theMan, the Company (New York,1954); Nevins and Hill, Ford: Expansion and Challenge, 1915–1933 (New York, 1957); Nevinsand Hill, Ford: Decline and Rebirth.

18 The BFRC has in recent years made nearly the entirety of these oral histories availableonline, http://cdm15889.contentdm.oclc.org/cdm/.

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Ford’s Mission and His Charismatic Staff

Charisma, understood as a social phenomenon, arises as an insur-gency against the status quo. What legitimates a charismatic leader isthat he or she symbolizes a credible revolutionary mission.19 To graspHenry Ford’s charismatic appeal, therefore, we need to understandwhat made his mission appear “revolutionary” in the political andsocial context of his time. As everyone knows, Ford set out to build asturdy motor vehicle for popular use at a cheap price. In pursuing thisvision, the Ford Motor Company perfected production techniques—assembly lines, sequencing of operations, and the scaling up ofmachine tools—that resulted in unprecedented economies of scale.These allowed Ford not only to pay high wages to unskilled workersbut also to lower the price of his Model T while reinvesting the plentifulproceeds into continuous expansion of production.

The annals of automotive history have tended to treat these achieve-ments primarily as a type of innovative business proposition, as thoughthe sole significance of the Model T lay in Henry Ford’s intuiting themarket potential for a popular car. What made these achievementsappear revolutionary to Ford’s followers, however, was not primarilytheir business success, but rather the challenge they put to the socialassumptions and political-economic hierarchies of their time. Hindsightobscures the extent to which theModel T was, first, a social provocation.The early automobiles that appeared in America in the 1890s were poshand pricey status symbols customized for the Gilded Age haute élite.These were not “consumer durables” but artifacts carrying a statusvalue perhaps akin to that of the private jet today. In the face of suchgenteel distinction, the rough-and-tumble Model T thrust the populistproposition that technological innovation and mobility should avail thecommoner.20

Mass production and the Model T, second, expressed a distinctiveview of the political economy. It is too often forgotten that Henry Ford(and his closest associates) hailed from a working-class milieu—that ofthe mechanics, machinists, and skilled metal workers whose middlingshops and producerist culture flourished in the shadow of the large rail-road and mining fortunes of the Midwestern elites. Mechanics like Fordacquired expertise through practical on-the-job experience and expected

19Adair-Toteff, “Max Weber’s Charisma.”20 For an incisive exploration of the class and status dynamics of the early automobile

industry, see Donald Finlay Davis, Conspicuous Production: Automobiles and Elites inDetroit, 1899–1933 (Philadelphia, 1988). See also Ronald Edsforth, Class Consciousnessand Cultural Consensus: The Making of a Mass Consumer Society in Flint, Michigan (NewBrunswick, N.J., 1987), chap. 3.

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their skills to furnish them with chances for upward social mobility. Themechanics shared the producerist outlook and anticorporate populismthat suffused Midwestern politics around the turn of the twentiethcentury.21

As the mechanics who ran the Ford Motor Company saw it, thetransformative achievement of automotive mass production camedirectly from the shop floor. It arose from the technological ingenuityand productive expertise of skilled labor. Mass production and theModel T also seemed to provide tangible proof of a broader conviction:that productive labor was the exclusive basis of social and economicprogress. The goal, Henry Ford declared, was “to employ still moremen, to spread the benefits of this industrial system to the greatest pos-sible number, to help them build up their lives and homes.”22 CharlesSorensen, Ford’s longtime production chief, credited Ford with the dis-covery that growth depended on widely distributed moderate incomesrather than the huge fortunes accumulated by the wealthy. “Higherwages, higher production—this must be the formula,” he recalled.23

In Sorensen’s telling, this “formula”was the unstated motive behindthe Ford Motor Company’s landmark innovations: the assembly linesystem of Highland Park (1913), the five-dollar day (1914), and the stead-ily declining price of the Model T (from $900 in 1909 to $200 in 1921, ininflation-adjusted dollars).24 The “formula” also inspired Ford in 1915 towithhold dividends to stockholders and channel the company’s abun-dant profits into the construction of a new factory (River Rouge). Thiswas the very decision over which Ford’s minority stockholders sued,and which in turn prompted Ford to acquire exclusive ownership ofhis company in 1919.25 Sorensen recalled:

To this day I still get a thrill when I review it like I am doing now. Itwould never have been possible if Henry Ford had listened to his

21On producerism as political philosophy, see Alex Gourevitch, From Slavery to the Coop-erative Commonwealth: Labor and Republican Liberty in the Nineteenth Century (Cam-bridge, U.K., 2015). On the political vision of the mechanics, see Noam Maggor, BrahminCapitalism: Frontiers of Wealth and Populism in America’s First Gilded Age (Cambridge,Mass., 2017), esp. chap. 4. On Midwestern Populism, see Norman Pollack, The PopulistResponse to Industrial America: Midwestern Populist Thought (Cambridge, Mass., 1962).On Detroit Populism, see Melvin Holli, Reform in Detroit: Hazen Pingree and Urban Politics(New York, 1969).

22 “An Outside Vision,” Ford Times, Oct. 1916, 106.23Reminiscences of Charles Sorensen, folder “Philosophical Comments on Manufactur-

ing,” acc. 65, box 68, n.p., BFRC.24W. G. Waffenschmidt, Das Wirtschaftssystem Fords: Eine theoretische Untersuchung

(Berlin, 1926), 7.25Nevins and Hill, Ford: Expansion and Challenge, 86–113; M. Todd Henderson, “Every-

thing Old IsNewAgain: Lessons fromDodge v. FordMotor Company” (Olin Law&Economicsworking paper no. 373, Chicago University Law School, 2007).

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directors and stockholders. They had the profit motive. They wouldnot accept the formula. Profits was their formula. It took five yearsto eliminate that [1914–1919]. With [their] formula there would beno Rouge plant and all that went with it. Henry Ford saw all thisclearly. It was no speculation. Stick to the formula, and he did. CanI make it clear? The formula did it.26

Sorensen, a son of working-class Danish immigrants, exemplifies thebackgrounds of the skilled mechanics who ran the Ford Motor Companyand embraced Ford’s producer populism. Sorensen had quit high schoolin his teens to become a patternmaker apprentice. Like many of Ford’sclose associates, he joined the company in its founding period andstayed for several decades, working his way up through the ranks.Ford managers were “mechanically minded men without formaleducation,” mostly first- or second-generation immigrants of northernEuropean descent, who shared an ethos of on-the-job training andpractically acquired expertise.27

In the words of a former staffer, Henry Ford favored “productionmen rather than businessmen” and was “never favorable to anythingwhich took on white collar workers.”28While other corporations increas-ingly put theoretically schooled engineers in charge of their shops andbusiness school graduates into their boardrooms, promotion at Fordcame almost exclusively through the ranks. In Sorensen’s words, the suc-cessful Ford manager was a “specialist but not an expert.”29 Ford’s pro-duction men were joined by clerks with often checkered educationalrecords who acquired the substance of their accounting knowledge onthe job.30 Both on the shop floor and in the offices, Ford’s staff consistedof men whose upward mobility depended on sustained work experienceand continued allegiance to the company.

The Ford Motor Company, then, refused to welcome the efficiencyconsultants and proponents of “systematic” management who increas-ingly intruded on American factory floors elsewhere.31 Unlike otherautomakers, Ford also resisted a second powerful force transforming

26Reminiscences of Charles Sorensen, “Philosophical Comments,” n.p.27Olivier Zunz, Making America Corporate, 1870–1920 (Chicago, 1990), 79–90. An

exception to this social makeupwas production chief PeteMartin, a Catholic French-Canadian.28Reminiscences of Ernest G. Liebold, acc. 65, pp. 1110, 1173, BFRC.29 Charles E. Sorensen with Samuel T. Williamson, My Forty Years with Ford (New York,

1956), 55.30 Yarnell, “Ford Motor Company’s Lost Chapter,” 152.31 On the transformation of management, see Daniel Nelson, Frederick W. Taylor and the

Rise of Scientific Management (Madison, Wisc., 1980); Zunz, Making America Corporate;Sanford Jacoby, Employing Bureaucracy: Managers, Unions, and the Transformation ofWork in American Industry, 1900–1945 (New York, 1985); and Yehuda Shenhav, Manufac-turing Rationality: The Engineering Foundations of the Managerial Revolution (Oxford,1999).

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the industrial landscape: the influx of outside capital. As Ford was takinghis company off the market, General Motors invited the chemical con-glomerate DuPont de Nemours, and later the investment bank J.P.Morgan, to obtain substantial stakes. Eventually, these investors tookover the corporation and appointed a fresh group of executives to runit (of whom Alfred Sloan would become the most well known).32

During the very period that Ford was solidifying his hold over the FordMotor Company, in other words, other Michigan automakers lostcontrol over their divisions to deep-pocketed eastern investors. Inshort, in a period when finance capital, white-collar professionalization,and corporate bureaucracy were eroding the stature of the skilledmechanics in American industry, the Ford Motor Company reassuredtheir self-image and reaffirmed their claims to industrial leadership.

A comparison with General Motors might give some clarification ofthe Ford mission. In his “Product Policy” memo of 1921, GM’s AlfredSloan famously stated that “the primary object of the corporation wasto make money, not just to make motor cars.”33 In contrast, HenryFord declared in My Life and Work (1922) that “the primary object ofthe manufacturing corporation is to produce, and if that objective isalways kept, finance becomes a wholly secondary matter.”34 InWeberianterms, one might say that the famous refashioning of GM under Sloanexpressed instrumental rationality: that is, given the priority of“making money,” what organizational structure and market strategymight best serve that goal? Measured in terms of this declared goal, asis well known, GM was more successful than the Ford Motor Companyfrom the mid-1920s.

What is striking in Ford’s statement, in contrast, is that it expressesat once more and less than a business strategy: that production shouldtake priority over finance is both an organizational goal and a normativeclaim. The Ford Motor Company’s organization, then, embodied valuerationality: given collective values (a skilled-labor ethos, produceristcommitments, antifinance sentiments), what organizational structureand what policies might best give expression to them?35 More than any-thing, this perspective explains the company’s oft-criticized decisions,such as the overlong attachment to the one-size-fits-all Model T, and

32Alfred D. Chandler and Stephen Salsbury, Pierre S. Du Pont and the Making of theModern Corporation (New York, 1971), 433–511.

33 Alfred P. Sloan, My Years with General Motors (Garden City, N.Y., 1963), 64.34Henry Ford, in collaboration with Samuel Crowther, My Life and Work (Garden City,

N.Y., 1922), 156.35 I am aware that the opposition of instrumental and value rationality employed here is

open to challenge on theoretical grounds derived from Weber. In practice, all social ordersemploy both forms of rationality; see d’Avray, Rationalities in History. In particular, itcould be argued that Sloan’s statement is an expression of values just as much as Ford’s.

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its rejection of managerial bureaucracy. It helps explain, too, the com-pany’s jaundiced view of advertising, product embellishment, frequentmodel changes (or, planned obsolescence), and consumer credit. Thetrajectory of the Ford Motor Company after 1920, so puzzling whenmeasured in Sloan’s terms, looks much less bizarre and actually quitecoherent once we factor in the producer orientation and value-baseddenigration of finance at the core of the company’s mission.

As is well known, Henry Ford used his newfound prominence afterthe five-dollar-day sensation to embark on a series of highly visible polit-ical forays, such as the ill-fated “Peace Ship” expedition of 1915; anantiwar campaign at home that earned him the unlikely epithet of “anar-chist” from the Chicago Tribune (Ford sued for libel and won); the bidfor the government complex at Muscle Shoals; and, most notoriously,the lurid anti-Semitic campaign of the Ford-owned Dearborn Indepen-dent. These efforts increased public awareness of Ford’s political ambi-tions outside of the company, where they had previously been seen asbroadly consistent with several Populist tenets—with isolationist prefer-ences, skepticism of financial elites, and a pronounced susceptibility toconspiracy theories.36

Did staffers share Ford’s politics? What role did anti-Semitism playin the charismatic dynamic? Two of Ford’s closest associates—companyphilosopher William Cameron and Ford’s factotum Ernest Liebold—were directly involved in launching the Dearborn Independent. Theyalso clearly shared Ford’s anti-Semitism.37 Midlevel staffers outside ofFord’s inner circle appear more divided though hardly opposed toFord’s prejudices. Sales manager H. C. Doss, for example, endorsedthe Independent’s campaign but added that “it certainly didn’t help busi-ness.”38 Herman Moekle, chief accountant, said that he “never had any-thing to do with the Dearborn Independent” but felt that the campaign“would tie in to a certain extent with [Ford’s] distaste of Wall Street” andhis belief “that any manipulation of business interests from the moneystandpoint was wrong.”39

36Reynold M. Wik, Henry Ford and Grass-Roots America (Ann Arbor, 1973); DavidL. Lewis, The Public Image of Henry Ford: An American Folk Hero and His Company(Detroit, 1976), 69–236.

37On Ford’s anti-Semitism, see Leo P. Ribuffo, “Henry Ford and the International Jew,” inRight Left Center: Essays in AmericanHistory (New Brunswick, N.J., 1992). On theDearbornIndependent and the roles of Liebold and Cameron, see Neil Baldwin, Henry Ford and theJews: The Mass Production of Hate (New York, 2001). On Liebold’s pro-Nazi positions inthe 1930s, see Stefan Link, “Rethinking the Ford-Nazi Connection,” Bulletin of the GermanHistorical Institute 49 (Fall 2011): 135–50.

38Reminiscences of H. C. Doss, acc. 65, p. 32, BFRC.39Reminiscences of Herman L. Moekle, acc. 65, pp. 87–88, BRFC. Shop floor superinten-

dent Klann recalled that in “about 1913 and ’14” (that is, several years before the Independent’slaunch) the company had “a general policy against hiring Jews,”which was understood to have

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In short, for some of Ford’s staffers, anti-Semitism appears to havebeen an important part of the collective value system; for others, it is lessclear. By and large, staffers accepted Ford’s anti-Semitism as part ofthe mission, but few seem to have based their affective identificationwith the company exclusively on it. In the day-to-day task of runningthe company, other issues mattered more. What primarily galvanizedFord’s administrators and shop-level machinists was the company’sculture of practical expertise and collective achievement in furthering“the formula”: a commitment to technology, engineering, and produc-tion, which emerged from the shop floor, remained unperturbed byfinancial priorities, and was immune to the pretensions of outside pro-fessional expertise.

A Mission-Driven Organization: Finance and Accounting

After the 1919 buyout, the Ford Motor Company reinvested most ofits earnings, sustained operations that the founder favored even whenthey were unprofitable, and made decisions on capital outlays not onthe criteria of investment returns, but on whether the expenditure fur-thered research, improved production, or propagated the produceristcause. This was possible for two reasons: first, as a privately heldcompany, Ford could afford to eschew the type of strict financial over-sight and budgetary planning generally required by outside sharehold-ers; second, thanks to the Model T windfall and the early success ofthe Model A, the company had at its disposal ample funds that it didnot come close to exhausting, even during the depressed 1930s. In thissense, the Ford Motor Company behaved much like a nonprofit boastinga substantial endowment.40

Freed from the need to satisfy outside shareholders, the companyembarked on a robust policy of reinvestment. Before the buyout, theFord Motor Company distributed an annual average of 44.75 percentof net earnings to stockholders.41 In the two decades after the buyout,which included the most profitable years in the first half-century of thecompany’s existence, the level of distribution was 24.78 percent; in an

originated from Henry Ford. However, Klann stated that, more than once, he ignored thisinjunction and “hired a couple of Jewish boys” since “I didn’t care whether they were Jewsor Italian fellows or Germans, as long as they did their jobs.” Reminiscences of WilliamC. Klann, acc. 65, pp. 17–18, 104–5, 143, BFRC.

40 Four common features of nonprofit organizations—i.e., being privately held, mission-driven, reinvestment-oriented, and endowment-dependent—also characterized the FordMotor Company during the interwar years.

41 Calculated after Henderson, “Everything Old Is New Again,” 20.

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instructive comparison, over the same time period, GM paid out 77.86percent of its net earnings.42

As a result, the company accumulated formidable liquid reservesduring the 1920s. Again, a comparison with General Motors is revealing:even as GM surged ahead in earnings, Ford’s absolute cash positionremained stronger than that of its rival throughout most of the interwaryears (Figure 1). Along with Ford’s decision to shun the burgeoningcapital markets of the 1920s—the company refrained from borrowing,or issuing new stock—its cash position not only allowed the companyto stay solvent during the income-starved 1930s, but actually gave itenviable operational independence. Ford’s single strength, Fortuneacknowledged in its 1947 piece, was that the company was “stillsolvent from the fruits of the fat years,” with a treasury of “almost$300 million in cash.”43 What was more, “the Company didn’t owe acent.”44

These figures, however, understate the degree of reinvestment, sincethe Ford family’s dividend earnings often redounded to the larger orga-nization. During the 1920s, the company expanded rapidly, as itbranched into subsidiary operations such as coal mining, lumbering,shipping, aviation, and railroading. In setting up these operations,Henry or Edsel Ford frequently forwarded the necessary funds fromtheir private accounts. For example, when the company acquired theDetroit, Toledo & Ironton Railroad in 1920, Henry Ford bought theshares and assumed the road’s substantial bonded debt. Ford’s executiverecalled that, in order to keep the road operating, “why, I advanced themoney from Mr. Ford’s funds for the payrolls and such other expensesas they required.”45 In keeping with this practice, Ford’s accountantsupheld the separation between the books of the Ford family (as

42 Ford Motor Company earnings and dividends since 1926 are calculated from consoli-dated accounts listed in the 1944 estate papers of Edsel Ford, which can be found in acc.134, box 45, BFRC. Information for 1920–1925 is compiled from accounting records in acc.157, box 273, and acc. 398, box 4, BFRC. For GM earnings and dividends, I used “GM corpo-ration earnings and dividends, 1920–54,” Alfred D. Chandler Jr. Papers, box 238, folder 8,Baker Library, Harvard Business School. The figures in this source agree with those given inGM’s annual reports, rounded to the nearest $1000. Dividends include preferred andcommon stock. For further reference, Chrysler, over its first thirteen years after incorporation(1925–1937), distributed roughly 60 percent of net income to shareholders. Calculation basedon Federal Trade Commission, Report on Motor Vehicle Industry (Washington, D.C., 1939),557. A sample of forty-eight manufacturing corporations listed inMoody’s Analyses of Invest-ments and Securities Rating Service: Industrial Securities (New York, various years) averaged70 percent of distribution in the period 1927–1930. John H. Ciccolo Jr. and ChristopherF. Baum, “Changes in the Balance Sheet of the U.S. Manufacturing Sector, 1926–1977,” in Cor-porate Capital Structures in the United States, ed. BenjaminM. Friedman (Chicago, 1985), 87.

43 “The Rebirth of Ford,” 82.44Reminiscences of Moekle, 210.45Reminiscences of Liebold, 646.

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stockholders) and the books of the company primarily for legal and taxpurposes. In practice, they assumed that company and family fundsoverlapped, and acted accordingly.46 By these informal arrangements,dividends remained part of the funds of the greater Ford organization.47

How the company maintained its subsidiaries also reflected the cen-trality of its mission. Subsidiaries often combined philanthropic ordevelopmental aims with production purposes. The so-called FordVillage Industries, for example, produced small parts—spark plugs,axles—for shipment to the Rouge. Constructed in state-of-the-art mod-ernist architecture and taking advantage of water power, however,these factories also were experiments in decentralized industrial activity

Figure 1. FordMotor Company and General Motors Liquid Assets, 1920–1939. (Sources: Fordand GM balance sheets as listed in the annual issues ofMoody’s Analyses of Investments andSecurities Rating Service: Industrial Securities [New York, various years].)

46 Two examples: First, Ford’s accountants wondered how Edsel Ford should be compen-sated in order to increase the “total remaining to corporation and stockholder after taxes”(emphasis added). Since an executive salary was subject to a 50 percent individual surtax,they concluded that no such salary should be paid. Herman Moekle, memorandum, 2 Feb.1923, acc. 398, box 5, BFRC. Second, in the early 1920s, Ford’s accountants tried to assessthe implications of new federal tax penalties on excessive retention of earnings. They con-cluded that paying out higher dividends could result in a lower tax return: “How much divi-dend would have to be declared [to avoid tax penalties] depends entirely on the needs of thebusiness.” Moekle to B. J. Craig, departmental communication, 18 Nov. 1922, acc. 398, box4, BFRC. On tax policies that penalized excessive accumulation of corporate surplus, seeW. Elliot Brownlee, Federal Taxation in America: A Short History (Cambridge, U.K.,2004), 62, 94–95.

47Direct evidence of transmittals from the Fords’ private funds to Ford Motor Companysubsidiaries (Detroit, Toledo & Ironton Railroad; the Michigan Iron, Land, and LumberCompany; and the Dearborn Publishing Company) can be found in Liebold Papers, acc.284, box 11, BFRC.

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meant to offer year-round employment to rural areas.48 Subsidiariessuch as the village industries were expected to produce efficiently, butthey did not keep their own profit and loss accounts. Rather, “anyexpenses incurred by them were paid by the Ford Motor Company.”49

Between 1921 and 1946, the company operated on a “single-entrybranch accounting system” that centralized control in Dearborn.50 Sub-sidiaries were “paper corporation[s],” whose expenses factored into theoverhead of the parent company.51 As outfits with experimental, devel-opmental, or social purposes, these subsidiaries were not operated tobe profitable and often failed to cover their own costs. Rather, theparent company funded subsidiaries, profitable or not, as long as theyadvanced the company’s mission. In other words, the company’smission-centered modus operandi explained the seeming laxity thatprompted Fortune’s headshaking remark that headquarters was notable to tell “which operation was paying its way.”

The necessity for sharp accounting was further attenuated by thecompany’s large liquid funds. As one of the company’s chief accountantsrecalled, for the large expansion of the 1920s “no master plan was everdrawn up from a financial standpoint.” Instead,

it was a question as to whether or not the particular developmentwas a desirable thing, whether it would promote the business,whether it would do something better at the time than was beingdone prior to that time. If it was considered to be that in theopinion of Mr. Ford’s advisers and Mr. Ford agreed with them,why, they went through with it.52

For example, in Sorensen’s telling, the landmark River Rouge steel millresulted not frommarket analysis or ponderous cost-benefit accounting,but from the production needs of the company and the perceivedmonop-oly behavior of outside suppliers. For steel,

in the period of 1919 to 1929 the demand exceeded the supply. Wewere tearing our hair. The profit motive seemed to interest steel-makers more than increasing facilities. It was evident somebodyhad to add facilities. We decided to make steel, just as simple asthat, after we had been driven to it. When I produced a plan of asteel mill . . . and showed it to Edsel and Henry Ford and told themit would cost $35,000,000, there was not the least hesitation on

48Howard P. Segal, Recasting the Machine Age: Henry Ford’s Village Industries(Amherst, Mass., 2005).

49Reminiscences of O. H. Husen, acc. 65, p. 35, BFRC.50Reminiscences of L. E. Briggs, acc. 65, p. 18, BFRC.51 Ibid., 27; Reminiscences of Husen, 35, 81; Reminiscences of Moekle, 97.52Reminiscences of Moekle, 94, 109.

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their part. Henry Ford’s reply to the proposal was, “what are youwaiting for?”53

Leaving room for hyperbole, we can take this anecdote as sufficientlyillustrative of both the financial strength and the informal budgetarypractices of the Ford Motor Company in the 1920s.

Noncodified Routines: Ford’s Inner Circle and His MidLevelAdministrators

Ford’s buyout of minority stock, then, had momentous conse-quences in the financial sphere. Less well known, but equally consequen-tial, was Ford’s simultaneous decision to reject the administrativerecommendations of management consultants. In 1919, the New Yorkefficiency firm Thompson and Black, originally hired to orchestrate thebuyout, produced a chart that sought to clarify the company’s organiza-tional structure (Figure 2). It would remain the only such artifact in thecompany’s history before the end of World War II.

The chart was a typical exemplar of the kind of administrativeflowcharts popularized by Progressive-Era “systematizers” of manage-ment. Speaking in terms of classical organizational theory, it depicteda centralized, functionally departmentalized business. However, as willbecome clear presently, the chart misrepresented the administrativerealities of the Ford Motor Company in crucial ways. First, it suggestedself-contained offices with mutually delineated spheres of authority; inreality, Ford staffers habitually moved among several spheres of compe-tence at once. What responsibilities separated “production manager”Knudsen from “general superintendent” P. E. Martin remained unclearin the chart—a telling concession to the reality that the twomen operatedin close contact and were seen to share authority at Highland Park.Second, the chart failed to account for the routinized close coordinationbetween separate company spheres. It attempted to distinguish financialauthority (under Klingensmith) from operations (under Knudsen andMartin), a separation entirely spurious for the Ford Motor Company.For example, the chart gave no sense of the intimate contact betweenthe Highland Park shop floor and the purchasing department.54

Finally, several names were conspicuously absent from the chart: pre-cisely those staffers whose authority cut across the organization, suchas Sorensen, Liebold, and, of course, Henry Ford.

53Reminiscences of Sorensen, folder “Rouge Expansion,” acc. 65, box 68, n.p., BFRC.54 See Yarnell, “Ford Motor Company’s Lost Chapter.”

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In short, the chart drawn up by Thompson and Black constituted aheroic and failed effort to make the company’s flexible and informaladministrative structures legible to the logic of “systematic” manage-ment. In April 1920, Ford ordered the chart scrapped, reasoning that itwas “too confusing to the men” and “too military.”55 In My Life andWork, Ford elaborated that he had no patience for “excess organization

Figure 2. “Ford Motor Company Organization Chart, November 1, 1919.” The company’s lastorganization chart before 1946. (Source: Photo ID#84.1.1660.P.D.311, acc. 1660, box 37, folder6, Benson Ford Research Center, Dearborn, Michigan.)

55Handwritten memo, 6 Apr. 1920, John Long Papers, acc. 1786, box 1, BFRC.

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and red tape” of the type that “results in the birth of a great big chartshowing, after the fashion of a family tree, how authority ramifies.”Instead, Ford claimed, the company had “no organization, no specificduties attaching to any position, no line of succession or of authority,very few titles, and no conferences.”56

Brash though it may seem, this description appears to have beenlargely accurate: a pervasive antibureaucratic ethos pervaded the day-to-day administrative practice of the Ford Motor Company. Clericalpaperwork was strictly subordinated to the needs of the shop. Coordina-tion proceeded through informal and implicit hierarchies based on per-sonal relationships. Spheres of responsibility were not codified andcompartmentalized, as the 1919 organization chart suggested; rather,they resulted from spontaneous delegation, independent initiative, insti-tutional habituation, and informal cooperation. Company procedureswere governed by “unwritten laws.”57 No organization chart was neces-sary, because, as one clerk put it, “it was generally known who was incharge of what.”58

The antibureaucratic ethos animated both the company’s upperadministrative echelons and its midlevel office personnel. In legalterms, the Ford Motor Company after 1920 was a Delaware corporation,with the three stockholders—Henry, his wife, Clara, and their son,Edsel—listed as directors, and Edsel acting as company president. Inpractice, however, the corporate form meant very little, as meetings ofthe board were a “formality only” and minutes were drawn up simply“to comply with the law.”59

Strategic policy did not originate in formal deliberations, but ratherbubbled up from among a group of close associates that staffers furtherdown the line referred to as “Mr. Ford and his immediate advisors.”60

Membership in this group fluctuated over time and depended onwhose ear the founder had in any given matter. Core members,however, included Martin and Sorensen, in the production sphere;Edsel, who oversaw administration and finance; and Liebold, companysecretary and Ford’s appointee for special tasks. In the 1930s, much to

56 Ford, My Life and Work, 91–92. See Weber, Economy and Society, 1:243: “The admin-istrative staff of a charismatic leader does not consist of officials. . . . There is no such thing asappointment of dismissal, no career, no promotion [and] no hierarchy; there is no such thingas a definite sphere of authority and of competence.” Alfred Chandler used this very passagefrom My Life and Work to document Ford’s “contempt” for formal administration. Chandler,Giant Enterprise, 113, 141–44.

57 Reminiscences of Cowling, 37, 39. This term is also used in Reminiscences of AlexLumsden, acc. 65, p. 32, BFRC.

58Reminiscences of Briggs, 55.59 Ibid., 68; Reminiscences of Liebold, 1096. For the railroad, the company recorded “the

minutes of imaginary meetings.” Reminiscences of Stanley Ruddiman, acc. 65, p. 14, BFRC.60Reminiscences of Moekle, 94, 96, 110.

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the vexation of Ford’s other associates, this group was increasingly dom-inated by Harry Bennett. Since Henry was loath to involve himself inday-to-day administration, he relied on this group of executives to runthe company for him.

Rarely did Henry Ford issue a proposition of his own; rather, hislieutenants presented ideas to him. This sometimes required an activeanticipation of the founder’s wishes. “I could sense what he wantedand I did not need to be told what to do,” recalled Sorensen.61 Henry,in turn, gave his lieutenants the implicit authority to proceed in which-ever ways they considered proper. This dynamic of authority delegationjibed with noncodified spheres of competence: getting a job done mightrequire short procedures. “When I had charge of production,” Sorensenrecalled, “I could advise, check up, or dip into the treasurer’s affairs,watch capital investments, and hold up what expenditures I felt wereunnecessary.” He felt that “anyone who had Henry Ford’s confidencehad the same privileges in his field that I had in mine.”62 This dynamicof subordinate self-initiative resulted in the fact that the founder’s deci-sion—which was beyond dispute—frequently appeared in the form of aveto (as, for example, in the case of the withdrawn organization chart).Such periodic vetoes would then reestablish the course as the foundersaw it.

Conspicuous in the company’s administration was the role of“special-assignments man” who “reported directly to Henry Ford.”63

Such plenipotentiaries were seen to wield Ford’s directly delegatedauthority and hence had the power to circumvent established companychannels, recruit company resources, or appropriate necessary fundsfor appointed tasks. For example, Ford put Liebold in charge of theDetroit, Toledo & Ironton Railroad, instructing him to proceed as hesaw fit. Liebold refashioned the railroad in keeping with the companymission. He lowered freight rates by 20 percent, raised wages to theuniform Ford six dollars a day, abolished organizational titles, andrevised administration “so we could get along with the least amount ofbook work and bookkeeping that was necessary.” Liebold recalled hispride in having the founder’s backing in these activities, an experiencehe described as having “carte blanche.”64

To Liebold’s great satisfaction, the refashioned railroad began tooperate profitably despite higher wages and lower freight charges. Heconcluded his recollections with these words:

61 Sorensen, My Forty Years with Ford, 33.62 Ibid., 48.63Reminiscences of L. S. Sheldrick, acc. 65, p. 23, BFRC.64Reminiscences of Liebold, 667, 677, 698.

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No great mind was responsible for the results beyond the generalsupervision and advice of Mr. Ford. . . . It was the result of co-opera-tive effort of efficient men working in harmony toward a commonpurpose, doing their best to serve their master and the generalpublic.65

A similar esprit de corps could be found in midlevel administrativespheres.66 Clerical work at the Ford Motor Company was most conspic-uous in two realms: A small group of accountants kept the books of thecompany and its subsidiaries, prepared tax returns, and served as afinancial information clearing center for operations people.67 A moresubstantial force of clerks was active in the logistical support of thefactory; these unsung heroes of mass production staffed the sales,purchasing, specifications, traffic, receiving, and cost accountingdepartments.68

In their recollections, these administrators uniformly recalledworking within implicit hierarchies and informal protocols. “We oper-ated without classifications and titles,” recalled one Ford accountant.69

“There were no titles anywhere and no organization charts,” accordingto another former administrator.70 The question of who reported towhom was “an intangible line. You couldn’t see it on a chart anywhere,”said a third.71 But despite the lack of charts, “the lines of authority werepretty clearly defined” and “we had pretty well defined departments.”72

The complex paper trail required by factory logistics was strictly sub-ordinated to the needs of the shop floor. While “it was generally under-stood” that record-keeping constituted “unnecessary overhead” if it“contributed nothing . . . but a lot of exchanging papers and figures,”the logistics departments developed their own records procedureswithin the bounds of this injunction.73 Damon Yarnell describes well-oiled routines among the company’s purchasing agents, who combineda sophisticated system of tracking stock and inventory with supple infor-mal arrangements.74 “We moved too fast to have any records catch upwith us,” recalled one purchasing agent. “We used personal contact.”75

65 Ibid., 672.66 I adopt “esprit de corps” from Damon Yarnell, who aptly uses the phrase to describe

Ford’s purchasing staff. Yarnell, “Behind the Line,” 216.67 Reminiscences of Briggs, 54.68 Yarnell, “Ford Motor Company’s Lost Chapter.”69Reminiscences of Briggs, 55.70Reminiscences of Husen, 32.71 Reminiscences of Moekle, 75.72 Reminiscences of Briggs, 13, 55.73 Reminiscences of Daniel Joseph Hutchinson, acc. 65, pp. 23, 25, BFRC.74 Yarnell, “Ford Motor Company’s Lost Chapter.”75 Ibid., 156.

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As one Ford accountant summarized company culture: “Production wasfirst, and book-keeping and accounting came second.”76

Self-Mobilization and Cooperative Competition: Running theShop Floor

Ford-style mass production is often seen as emerging from the samelogic of management control as Taylorism. Accordingly, labor historianshave tended to imagine the Highland Park shop floor as a thoroughlyTaylorized operation, in which white-collar engineers, ensconced in aplanning office, laid out the subdivision of tasks and dictated the paceof production.77 The recollections of Ford’s shop supervisors, however,tell a different tale. Running the shop floor was the responsibility ofskilled mechanics and foremen not beholden to outside efficiencyexperts. Highland Park supervisors emerged from the shop and sharedits culture; they rejected the theoretical distillation of “one best way”in favor of continuous improvements resulting from practice. From thesuperintendents down to the foremen, the skilled mechanics in chargeof the shop floor harbored a pronounced ethos of initiative in workingfor the company. This was a “close-knit group of men who lived on thejob,” as Sorensen noted in his memoirs. The accomplishment ofmeeting a punishing production schedule instilled a collective pride, “asense of achievement by association.”78

As in administration, there were no official titles; hierarchies andspheres of responsibility were implicitly understood.79 A dozen “superin-tendents” had overall responsibility for production. These superinten-dents spent much of their time “roving”—that is, acting as “troubleshooters” in areas where machines had failed or shortages threatenedto hold up the production flow.80 Superintendents were men who hadbeen with the company for many years and knew mass production inti-mately; their expertise was broad as well as deep, allowing them to moveeffortlessly between assembly, machining, and tooling and to coordinatethe shop floor and the logistics departments. These superintendents

76Reminiscences of Briggs, 22.77 See, for example, Stephen Meyer III, The Five Dollar Day: Labor Management and

Social Control at the Ford Motor Company, 1908–1921 (Albany, 1981); and ClarenceHooker, Life in the Shadows of the Crystal Palace, 1910–1927: Ford Workers in the ModelT Era (Bowling Green, Ohio, 1997).

78 Sorensen, My Forty Years with Ford, 54.79 Logistics clerk Anthony Harff gives a vivid overview of Highland Park shop floor admin-

istration in his Reminiscences, acc. 65, pp. 12–38, BFRC.80Reminiscences of Arthur A. Renner, acc. 65, 8, BFRC; Reminiscences of Roscoe

M. Smith, acc. 65, p. 12, BFRC.

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“were strictly shop people. They were out in the shop; they loved theshop. They had no use for an office really.”81

One of these superintendents was William Klann, who joined theFord Motor Company in 1905 as a machinist and worked his way upthe shop floor hierarchy. Klann recalled his role in these terms:

[In 1918,] I was made superintendent at Highland Park. Of course,that is what they called me. There was only one boss anyway andthat was Henry Ford. We went to Sorensen and Martin for ourorders and Mr. Avery and Hartner for our orders. You didn’t haveany title whatsoever. You just ran the shop, that’s all. You ran thatjob and you had your own baby, like your chassis assembly wasyour job and the motor assembly was your job, and the transmissionassembly was your job. Your job expanded, that’s all. You kept goinground. I took in the whole plant, actually. I watched the assembly andshipping.82

Answering to the superintendents was a group of departmental pro-duction men, who were in charge of individual operations (the foundry,crankshaft production, assembly operations, etc.). It was the responsibil-ity of these “general foremen” to make sure that their departments metthe production goals. In doing so, they relied on their own respectiveforemen (who in turn directed the unskilled operatives). The foremenshared in the culture of independent initiative. “You didn’t need instruc-tions to increase the speed. You did that on your own,” recalled RoscoeSmith of his time as foreman in the generator department, where hewas in charge of twelve operatives. “If you saw that you could make animprovement getting more pieces an hour, you went ahead and madethe change.” It was only afterward that “you’d call the Time StudyDepartment to change your time.”83 Floor-level foremen “took pride inknowing that their costs were coming down.”84

The company-wide injunction against red tape was reflected in amechanism of real-time cost accounting that was supported by a well-defined but narrow paper trail. On the floor, costs were tracked exclu-sively in terms of time units or “minute costs”: How much time did ittake to turn out a specific number of parts? This practice eliminatedthe need for dollar figures, which “the boys out in the shop didn’tneed,” and put responsibility for meeting production quotas firmly onthe shop floor.85 Clerks kept the books, but the logic of cost accounting

81Reminiscences of Harff, 32.82Reminiscences of Klann, 131.83Reminiscences of Smith, 11.84Reminiscences of Logan Miller, acc. 65, p. 16, BFRC.85Reminiscences of Harff, 33.

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was dictated by production routines, not by the office. As one of Ford’saccountants described the process in 1926, real-time costing was

the only method through which Ford production costs are kept downto the minimum in the shop. They have no such elaborate device as aPlanning Department, so-called, as you ordinarily run across in sometext books. Every man is supposed to work for the interests of thecompany, and when he sees a leak in any place, he is supposed tostop it right away, and not wait . . . for some cost accountant clerkto come along 30 or 45 days later and say, Why, six weeks [ago] soand so happened. That is history then. By a time basis we are abletoday to know what happened in the department yesterday.86

Or, as Klann recalled plainly, “On Tuesday if your cost was more than onMonday, you went out and found out why.”87

Foremen and supervisors uniformly recalled that improvements inmachining and assembly emerged from constant trial and error andthe collective expertise of the shop. Foremenwould come upwith sugges-tions for how to improve a particular assembly operation; machinistswould devise ways of repurposing tools that had become worn down.“I was experimenting all the time,” recalled Arthur Renner, generalforeman in tools. “A lot of these ideas on mass production camefrom men like myself who were thinking on the job.”88 Klann con-curred: “The various departments would all cooperate in turning upnew ideas. . . . A lot of these ideas came from the men as well as frompeople in supervisory positions. Lots of them came from the men.”89

All told, Ford’s shop supervisors—a group consisting of around fortysuperintendents and general foremen, along with several hundred lineforemen—worked in a thick social dynamic characterized by both coop-eration and competition. Noncodified hierarchies implied that it wasimpossible for anyone in a supervisory position to take his authorityfor granted; conversely, demonstrations of initiative, commitment, andskill promised social recognition and promotion. Collectively, superin-tendents and foremen operated under an implicit shop-wide system ofpeer oversight and evaluation. This dynamic appears to have unleashedconsiderable energies among skilled men who took great pride in andstrongly identified with their work. Constant pressure to justify standingand authority with production performance and shop floor accomplish-ments created a high-strung atmosphere of commitment. This social

86 Testimony [ca. 1926] of H. L. Leister [FMC auditor] from Transcript of Record, ParkerRust Proof Company v. Ford Motor Company, excerpted in acc. 572, box 15, folder 11.13.1,BFRC.

87Reminiscences of Klann, 151.88Reminiscences of Renner, 9.89Reminiscences of Klann, 117.

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dynamic underpinned the company’s most prolific years, with Model Tsales surging to over two million vehicles each year between 1923 and1925.90 “The period from 1919 through 1926 was the finest andmost effi-cient organization they ever had,” recalled one of Highland Park’s logis-tics clerks.91

From the perspective of charismatic governance, it is noteworthythat this shop floor ethos prevailed without prodding by Henry Ford.Though Ford would frequently stop by the shop, make recommen-dations, or even lay hands on the machines, the supervisory group oper-ated independently of these cameo appearances.92 In his memoirs,Sorensen described Ford’s leadership as “a radiant quality” that made“others spring joyfully into common action.”93 This charismatic appealappears to have been translated down to the shop floor through Ford’sproduction staff. Steel specialist Alex Lumsden recalled this in strikingterms:

These leaders [on the shop floor] were very great men. They may nothave had a great deal of knowledge about what makes the solarsystem work, or the background of history, . . . but they had some-thing which inspired you to do your best. It created a tremendousamount of loyalty of the part of a large, large group of men in theshop. One of the common remarks was, “Now listen, that’s not theFord spirit.” There was a Ford spirit. That was the commonexpression.94

The esprit de corps among the supervisors should not convey the impres-sion that the shop floor lacked stark hierarchies—quite the contrary. Theterm “Ford spirit” expressed the work ethic and status system of theskilled mechanics who ran the shop floor. It encompassed the foremenbut excluded the unskilled “operatives” who manned the lines andworked the machines. The majority of these workers were recent immi-grants, often of southern or eastern European origin and of Catholicfaith. Because of these workers’ backgrounds, and relative lack of skill,their Protestant and northern European supervisors generally disquali-fied them from inclusion among their ranks—and from the social andprofessional recognition these supervisors accorded one another. Inturn, the lower-skilled operatives had little reason to identify withtheir superiors or with the company they worked for. Monotonoustasks, punishing speeds, and limited chances for promotion, seniority,

90 See the numbers in Nevins and Hill, Ford: Expansion and Challenge, 685.91 Reminiscences of Laurence B. Trefry, acc. 65, p. 26, BFRC.92 See, for examples, Reminiscences of Renner, 13; Reminiscences of Liebold, 1126; and

Reminiscences of Stanley Ruddiman, 28.93 Sorensen, My Forty Years with Ford, 51.94Reminiscences of Lumsden, 11–12.

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or employment security characterized unskilled work at Highland Parkas much as elsewhere in the auto industry.95

Line foremen had extensive powers over work discipline and usedsuch powers in often arbitrary fashion.96 According to Renner, superin-tendent Pete Martin “wouldn’t tell [the foremen] what kind of policy tofollow in dealing with our personnel. That was entirely up to you; thatwas your job. The main thing that Mr. Martin was interested in wasmaking your standards and your production.”97 Such discretion cutboth ways. On the one hand, foremen recalled being responsive totheir operatives’ needs: they would fill in while a worker hurried to thebathroom, let operatives switch positions to avoid exhaustion, or evenallow them to abstain as long as the group had production covered.98

On the other hand, such episodes of lenience could not counteract thefact that the “speedup” was intrinsic to the Ford production system.Superintendent Klann bluntly acknowledged this, saying of the opera-tives, “Of course, we were driving them in those days. There was nopace making. It was driving all the time. . . . Ford was one of the worseshops for driving the men.” Supervisors took advantage of the disciplin-ary power built into the mechanized assembly lines. “You wouldn’t tellthem to go faster. You would just turn up the speed of the conveyor.”99

The charismatic dynamic among the supervisory staff, then, was aconstitutive part of the harsh working conditions for which the FordMotor Company became infamous. In 1914, Ford had tasked JohnR. Lee, a personnel manager with progressive leanings, with implement-ing the five-dollar day. Lee not only set up investigations into workers’lives under the notorious “Sociological Department,” but also estab-lished an employment office that sought to formalize hiring and firing.Unskilled operatives resented the intrusions of the Sociological Depart-ment. The shop floor elite, however, were also skeptical of Lee’s reforms,which they saw as meddling with the personnel prerogatives of plant

95On the social composition of the Highland Park workforce see, Meyer, Five Dollar Day,esp. 75–78. On the social distance between the foremen and the unskilled and semiskilledlaborers, see Nelson Lichtenstein, “‘The Man in the Middle’: A Social History of AutomobileIndustry Foremen,” in A Contest of Ideas: Capital, Politics, and Labor (Urbana, Ill., 2013),56–78.

96On the “foreman’s empire,” see Daniel Nelson, Managers and Workers: Origins of theTwentieth-Century Factory System in the United States, 1880–1920 (Ann Arbor, 1995),chap. 3.

97 Reminiscences of Renner, 13.98Reminiscences of Klann, 37, 85, 110; Reminiscences of James O’Connor, acc. 65, p. 48,

BFRC; Reminiscences of Renner, 38.99Reminiscences of Klann, 88, 107. See also Ronald Edsforth and Robert Asher, “The

Speedup: The Focal Point of Workers’ Grievances, 1919–1941,” in Autowork, ed. RobertAsher and Ronald Edsforth (Albany, 1995), 65–98.

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foremen.100 As part of the refashioning of his company after the buyout,Henry Ford dissolved the Sociological Department in 1921—a decisionthat returned authority over hiring and firing to foremen and superinten-dents. Those who had staffed the Sociological Department deplored themove as a turn away from enlightened labor policies.101 According toSorensen, however, the shop floor greeted the end of the SociologicalDepartment with “a great sigh of relief.”102

For the remainder of the interwar years, the Ford Motor Companyresisted pressures from both unions and progressive-minded employ-ment professionals to formalize labor relations. The implicit routinesthat shop supervisors experienced as a strength in production, thelower-skilled operatives experienced as arbitrary discretion. Unsurpris-ingly, the unionization drives of the 1930s demanded the protection ofcodified procedures. The skill-based collective ethos of Ford’s shopfloor elite, then, may help explain why the Rouge succumbed to theUnited Automobile Workers (UAW) only in 1941, later than the rest ofthe automobile industry.103

Institutionalized Charisma: The Rouge

In their “Reminiscences,” Ford’s staffers concurred that the pro-nounced esprit de corps that prevailed among them in the 1920s weak-ened in the 1930s. There were several reasons for this. One was theDepression, to which Ford’s formula—“higher wages, higher produc-tion”—failed to provide an answer.104 Similarly, Ford’s increasing ageand declining mental acuity damaged his credibility as a leader.105

Unsure of his hold over the sprawling company, and unnerved byincreasing militancy among the unskilled operatives, Ford retreatedbehind the one lieutenant he thoroughly trusted: the navy veteran andformer pugilist Harry Bennett, whose connections to Detroit organizedcrime and control over plant security gave him considerable power atthe Rouge.106

100Reminiscences of Klann, 106–10.101 Samuel M. Marquis, Henry Ford: An Interpretation (Boston, 1923).102 Sorensen, My Forty Years with Ford, 144–46.103 Sanford Jacoby describes how clashes over employment practices often pitted produc-

tion superintendents and foremen against personnel managers and unions. At Ford during theinterwar years, the production men prevailed. Jacoby, Employing Bureaucracy.

104 Reminiscences of Sorensen, “Philosophical Comments,” n.p.105 Reminiscences of Liebold, 1219–20; and Reminiscences of Sheldrick, 157. In 1938, Ford

suffered a stroke. Nevins and Hill, Ford: Decline and Rebirth, 231.106 The “Reminiscences” convey the impression that Bennett ran the employment office as

a Mafia-style patronage system, in which jobs at the Rouge became part of the subeconomy ofDepression-era Detroit. See Reminiscences of Renner, 40–41. On Bennett’s role, see Nevinsand Hill, Ford: Decline and Rebirth, 110–17, 235–42.

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Ford’s backing of Bennett, who “wasn’t considered a productionman,” bewildered staffers, and they blamed much of the deteriorationof the Ford ethos on his rise.107 Tasked by Ford to keep labor in check,Bennett and his network of spies had full control over the employmentoffice. From this key position, as chief engineer Sheldrick recalled,Bennett kept the entire organization in a “strangle-hold”: withoutBennett’s OK, “one could not hire, fire, raise or transfer a man.”108

Foreman Roscoe Smith resented having to submit to Bennett’s favorit-ism and hire “friends of his and friends of friends” who might turn outto be inept operatives.109 The shop floor and low-level staffers “hatedand feared” Bennett because he was seen to be interfering with produc-tion.110 Klann, the Highland Park superintendent, actually left thecompany when operations moved to the Rouge, because there,“Bennett wanted to run the shop and we didn’t work for Bennett; weworked for the Ford Motor Company.”111 Liebold felt that Bennett’seffect on the company was “disastrous.”112 Though many wanted tobelieve that “Henry Ford didn’t exactly understand the implications ofall that Bennett did,” the strongman’s rise at the Ford Motor Companyappears to have irreparably damaged Henry Ford’s standing amonghis staffers.113 The “Reminiscences” convey the impression that thosewho carried the company in the 1920s saw Bennett’s rise not as a contin-uation of the mission, but rather as its betrayal. Bennett, however, stillhad the founder’s backing, so “the men didn’t like it, but they had to tol-erate it.”114

The 1940s brought additional challenges. The UAW’s success inorganizing the Rouge upset shop floor dynamics. By establishingrecourse procedures around Rouge workplaces in 1941, unionizationseverely constricted the authority of line foremen. Foremen, in turn,felt that Bennett’s employment office went over their heads by negotiat-ing with the lower-skilled operatives. They responded by forming theirown union, the Foremen’s Association of America (FAA). In dealingwith the FAA, the company began deferring to War Production Boardguidelines—adopting standardized procedures that clashed with the“unwritten rules” dictating Ford administration.115

107 Reminiscences of Harff, 49–50.108Reminiscences of Sheldrick, 87.109Reminiscences of Smith, 40.110Reminiscences of Harff, 49.111 Reminiscences of Klann, 265.112 Reminiscences of Liebold, 1219.113 Reminiscences of Moekle, 161.114 Reminiscences of Harff, 62.115 Lichtenstein, “‘The Man in the Middle’”; Ford Motor Company to Ford Chapter of the

FAA, 28 Oct. 1943, Sorensen Records, acc. 38, box 101, BFRC.

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Given the severity of such conflicts, and considering how muchBennett’s rise damaged Ford’s credibility as a leader, it is striking thatthe administrative routines developed in the 1920s largely persisted.Slim accounting, implicit hierarchies, and noncodified spheres of compe-tence endured throughout the 1930s.116 Strict in-house recruiting andpromotion remained an unquestioned principle, and the companyremained closed to white-collar professionals.117 Production supervisionremained vested in a group of “roving” superintendents; engineeringinnovations continued to emerge from the shop floor.118 Some persistedin their loyalty to Ford, even to heroic degrees. For example,W. C. Cowling was promoted to sales manager in the difficult period ofthe early 1930s, when dealers fiercely protested Henry Ford’s insistencethat company models retain a mechanical brake, which public opinionconsidered hopelessly outdated. Cowling, however, deferred to what hetook to be Henry’s superior technical judgment and traveled to dealersto plead for the Ford organization and its products. “I religiously triedto do it,” Cowling said.119

In an even more remarkable pattern of collective initiative, staffersbegan, more or less openly, to circumvent the founder’s directiveswhen they considered them detrimental to the company. For example,in 1936, engineering moved the location of its workshop to escapeFord’s constant “monkeying” with design details. Engineers wouldendeavor “to do things his way. But when it came to actually puttingthings into production we more or less took things in our own hands.”Henceforth, design changes bypassed the founder’s input. Rather, theyemerged from collective deliberations among midlevel staffers: “As faras the administrative organization of the Company was concerned, theadvance model changes was a practical, personal arrangement betweenthe chief engineer . . . , the head of tool design, and the production

116Reminiscences of Briggs, 55–56. See also HartleyW. Barclay, Ford ProductionMethods(New York, 1936), in which the author maintained that the Ford operation “does not lend itselfto the establishment of a firmly entrenched management bureaucracy of ‘systematizers.’Mem-orandums and correspondence are held at a minimum. . . . There are no high-sounding jobtitles distributed about for the purposes of impressing other operating executives” (pp. 8–9).

117 An applicant asking if an “executive level position” was available was rejected with thisexplanation: “For your information, such positions in the Ford Motor Company are filled bypromotion from the ranks, rather than by hiring outsiders, and this has always been thepolicy of this company.” Sorensen to Executive Service Corporation, 4 Sep. 1943, acc. 38,box 100, BFRC.

118 For example, the first machining job “fully equipped with automation” at the Rouge was“the work ofmany hands.”Reminiscences ofMiller, 30. Arthur Renner described taking chargeof developing aluminum pistons at the Rouge, anticipating V8 technology. Reminiscences ofRenner, 20–26. Roscoe Smith recalled developing, along with others, the layout and machin-ing for the production of starters and generators at the Ypsilanti Village Industry. Reminis-cences of Smith, 36–39.

119 Reminiscences of Cowling, 29.

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people. It was worked out on a ‘Let’s talk it over’ basis.”120 Similarly, after1941, Sorensen and Edsel Ford essentially sidelined Henry from the con-version to war production, because, as Liebold recalled, Henry “was nolonger able to keep up” with the developments.121

In the 1930s, then, the inspiration for the company’s noncodifiedroutines began to depend less and less on Henry Ford and becameincreasingly attached to the organization itself. Charisma became lesspersonal and more institutionalized.122 As Ford’s authority declined,his staffers continued to run the company according to the principles ini-tially inspired by the founder’s mission, even if that now required cir-cumventing his directives, excluding him from deliberations, or actingagainst his wishes outright. “There wasn’t the same leadership that wehad before,” Ford’s chief accountant recalled, but “of course, the workwas cared for.”123

The recollections of staffers thus contradict the idea that the FordMotor Company descended into managerial chaos after the 1919buyout. The reality is rather more complex. During the 1920s, thecompany operated on a remarkably effective “charismatic” administra-tive pattern inspired by Henry Ford’s producerist mission. Ford arro-gated the last veto on all strategic matters and exercised it frequently.For the day-to-day realities of administration, however, the collectivediscretion, judgment, and initiative of his staffers was decisive. Ford’sstaffers did assert a crisis in leadership during the 1930s. However, soingrained were routines of administrative self-initiative that whenFord’s leadership inputs became counterproductive or ceased entirely,the company was largely able to continue operating without them.

Conclusion

To business historians working in the classical vein, Weber’s idealtype of rationalized bureaucracy served as the theoretical anchor forunderstanding the structure of the modern corporation.124 In this

120Reminiscences of Sheldrick, 153, 157, 240.121 Reminiscences of Liebold, 1186. See also Sorensen, My Forty Years with Ford,

273–300.122 “Depersonalization of charisma”may occur as charisma detaches from the leader and is

absorbed by “an institutional structure.” Weber, Economy and Society, 2:1135. According toWeber scholar Wolfgang Schluchter, depersonalization of charisma implies “a separation ofthe carrier and the mission”; while the leader ceases to serve as a source of collective inspira-tion, nevertheless “the mission is maintained” and congeals into “institutional charisma.”Schluchter, Rationalism, Religion, and Domination: A Weberian Perspective (Berkeley,1989), 392–408.

123Reminiscences of Moekle, 186.124 Alfred D. Chandler, The Visible Hand: The Managerial Revolution in American Busi-

ness (Cambridge, Mass., 1977). On Weber’s influence on Chandler, see Thomas K. McCraw,

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view, the modern corporation, with its ostensibly stable and efficientadministration, necessarily stood in antithesis to charismatic rule, withits rebellious orientation and seemingly amorphous organizational char-acter. This exclusive focus on rational administration, however, implieda rather selective reading of Weber, whose analysis proceeded from thepremise that all types of “legitimate rule” require socially constitutedmechanisms of organization. As Weber insinuated, and as the exampleof the Ford Motor Company demonstrates, charismatic authority doesnot imply organizational anarchy. Rather, it may give rise to a specifictype of organizational governance, one that exhibits its own peculiarmethods of mobilizing subordinates, delegating authority, and coordi-nating an effective division of labor.

This finding may be of use to business historians on at least twolevels. First, it contributes to ongoing efforts to understand the organiza-tional mechanisms that make firms run: how they “learn by doing,” howthey develop routines, how they coordinate tasks and process informa-tion.125 In particular, the notion of charismatic governance suggests asystematic vocabulary for describing certain social-informal featuresthat standard concepts of organizational theory struggle to capture. Associologists have long argued, organizational practices always rely oninformal procedures and personal networks to function effectively,and they always require consent among subordinates.126 Charisma,understood as “mobilizational” governance, expands on these insights.Central aspects of charismatic governance discussed above—thenotions of self-mobilization, esprit de corps, cooperative competition,and noncodified routines—highlight the intrinsically social nature ofwhat goes on inside the firm.

Second, the notion of charismatic governance may be helpful forthose business historians who grapple with the challenge of thinkingbeyond the parameters of the profitmaking firm.127 The example of theFord Motor Company demonstrates the misunderstandings that can

“Alfred Chandler: His Vision and Achievement,” Business History Review 82, no. 2 (2008):220–21. See also Jeffrey Fear, Organizing Control: August Thyssen and the Construction ofGerman Corporate Management (Cambridge, Mass., 2005), 29–30.

125Naomi R. Lamoreaux and Daniel M. G. Raff, eds., Coordination and Information: His-torical Perspectives on the Organization of Enterprise (Chicago, 1995); Naomi R. Lamoreaux,Daniel M. G. Raff, and Peter Temin, eds., Learning by Doing inMarkets, Firms, and Countries(Chicago, 1999); Raff and Scranton, Emergence of Routines.

126Mark Granovetter, “Economic Action and Social Structure: The Problem of Embedded-ness,” American Journal of Sociology 91, no. 3 (1985): 481–510; Robert F. Freeland, TheStruggle for Control of the Modern Corporation: Organizational Change at GeneralMotors, 1924–1970 (Cambridge, U.K., 2001).

127 See, for example, Hartmut Berghoff,Moderne Unternehmensgeschichte: Eine themen-und theorieorientierte Einführung (Paderborn, Germany, 2004), esp. 22–29; and PhilipScranton and Patrick Fridenson, Reimagining Business History (Baltimore, 2013).

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arise when historians assume that businesses reside in a sealed habitat ofpure economic rationality. It is possible that organizations that pursueaims beyond profit, or that harbor an explicit agenda of social andpolitical transformation, more easily develop features of charismaticgovernance (of course, Apple under Steve Jobs or Tesla under ElonMusk come to mind). The lens of charisma allows business historiansto see such an agenda in a different light: not as window dressing, notas an aberration from theoretical assumptions, but as reflecting politicalcommitments that have organizational consequences.

. . .

STEFANLINK is assistant professor of history at Dartmouth College. He iswriting a book on the global spread of Fordism in the interwar years.

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